Companies

Roots to expand faster, not gingerly

Our Bureau Chennai | Updated on July 12, 2012 Published on July 12, 2012

Mr Prabhat Pani, CEO & Director, Roots Corporation Ltd, at the launch of Ginger Hotel in Chennai on Thursday. — Bijoy Ghosh   -  Business Line

5 new properties to come up in budget category

In order to keep pace with the fast growing domestic tourism sector, the Indian Hotels-owned Ginger Hotels chain has put its expansion plan on fast track.

Ginger, a ‘smart basics’ budget hotel brand, is all set to launch five new properties in the next seven-eight months. Today, it launched its 26th property, taking its total inventory to 2,600 rooms. This is the second Ginger hotel in Chennai.

Other properties

Mr Prabhat Pani, CEO & Director, Roots Corporation Ltd (owner of Ginger), said the company’s plan is to expand its network by over 25 per cent during the current financial year. So far, it has launched two. Two more properties – in Mumbai and Bangalore – will be launched in the next couple of months.

Properties in Jaipur, Amritsar, Noida, Greater Noida and Chandigarh are under construction. “Most of them will be up and running before the last quarter of the current financial year,” said Mr Pani.

The company’s mid-term plan is to be an 80-hotel chain by 2015.

According to him, there is a great demand for mid-market and budget category hotels, driven predominantly by the domestic travel segment. Overall, there are about 1.63 lakh rooms in the country. And, going by the estimated growth in demand, the country would require 1.9 lakh more rooms by 2021, he said, quoting a study conducted by HVS, a global hospitality services company.

He said by 2021, the domestic travel segment would grow to 173 crore travellers by when the foreign travellers would account for 1.2 crore.

Occupancy steady

Occupancy levels in budget category hotels are also growing steadily. Going by the HVS study, the occupancy across budget hotels was at 57.5 per cent in 2010-11 and has been growing at close to one per cent, while occupancy in the five-star deluxe category has declined by 1.3 per cent during the year.

Roots Corp launched its first property in Bangalore in 2004, targeted at a frugal traveller. After quite a bit of restructuring, it launched its second property in 2006. From then on, the brand has been evolving to now include a mini-conference hall, coffee shop, restaurant and limited room service, aimed at the “same but evolving audience”, said Mr Pani.

As of now, there is no direct competition for Ginger in the organised segment. Mr Pani says, as the demand grows, the situation will change in the next couple of years. Roots Corporation is now willing to expand through ownership, management and public-private-partnership models across the country, he says.

“I see a fierce competition coming from both domestic and international brands. Unless we expand our footprint faster, we may lose the first mover advantage in several markets,” he said.

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Published on July 12, 2012
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